The new era of working from home brought by the coronavirus pandemic could also spark a massive new wave of homeownership, according to a data analysis conducted by Zillow.
The aspirations of renters dreaming of homeownership is not new. Indeed, an earlier Zillow survey from the Harris Poll found 66% of renters said they would consider buying if they were able to continue working from home.
As a result of remote work, Zillow estimated that nearly 2 million renter households who cannot afford the buy a home in their areas would be now be able to move elsewhere in the country and purchase an affordable starter home. These renter households represent 4.5% of the current rental housing population. Millennials could become the greatest segment to gain a homeownership foothold due to their ability to live and work anywhere, Zillow added.
The most expensive housing markets could see a dramatic exodus of renters. Zillow highlighted San Francisco as an example, where 22% of renters priced out of their metro could afford the roughly $7,200 monthly payments on a typical U.S. starter home.
However, there are exceptions to this scenario. In markets such as El Paso, Pittsburgh and Rochester, the share of affordable starter homes is higher than the national average, which means potential local buyers would be paying more if they chose to relocate elsewhere.
"If remote work becomes a bona fide long-term option especially with the pandemic, that could reshape the U.S. housing market by opening up homeownership to people renting in expensive parts of the country," said Zillow Economist Jeff Tucker. "However, it's unclear how many people would make the move to buy their first home. Proximity to work is just one of the factors people consider when choosing where to live. Other factors may keep them from moving including proximity to friends and family, cultural and natural amenities, and their kids' schools."